Indonesia bargaining position in EU CEPA is questionable

Civil Society Coalition for Economic Justice | 1 Feb 2017

Press ReleaseIndonesia Bargaining Position in EU CEPA is questionable

On 24-27 January 2017, Indonesia and European Union conducted the second round of negotiation for drawing up arrangements of free trade for CEPA (Comprehensive Economic Parthnership Agreement) in Bali, Indonesia. The negotiation aims to opening the market at various sectors, promoting and securing the interest of foreign investors from European Union and Indonesia.

The negotiation would cover various issues such as the market opening in commodity sectors, liberalization of service sectors, the market opening in government expenditure, regulation of State Owned Enterprises (BUMN), strengthening intellectual property rights, foreign investors protection, customs and trade facilitations, and collaborations.

In relation to that, director of Satu Dunia Foundation, Firdaus Cahyadi regretted the absence of information about this negotiation. “Until now, the government has never officially opened to public on the negotiation text that is being carried out. Public participation has been seemingly blocked by the action from government i.e the secrecy of information dissemination about the negotiations.”

In line with the above matter, Widhyanto Muttaqien Ahmad from CREATA, emphasized on the importance of public participation. “Looking at the negotiation of FTA between EU and other countries, the scope of the agreements will be very wide. If they are applied, domestic regulations will be affected (changed), and this will bring huge impact to the society.”

On access to medicines, Sindi Putri from Indonesia AIDS Coalition mentioned that in the chapter about intellectual property rights there are clauses pertaining the extension of patent terms. “This will create monopoly to medicine so that the availability of generic drugs which are affordable will be limited. With the existence of those clauses, the access to medicine will be affected.”

At the same time, Khalisah Khalid, head of Campaign Department and Networking Extension of WALHI (FoE Indonesia) reminds that instead of bringing economic growth, this negotiation will ensure greater protection for the foreign investment and investors from European Union countries. In practice, the investment in natural resources sectors have contributed to negative impacts in the society and also pressure for the environment such as forest fire and human rights violations.

Zainal Arifin Fuad, from Serikat Petani Indonesia / Indonesian Peasant Union, argued that the flow of free trade and agricultural products from EU will marginalize the agricultural products from Indonesian farmers. Besides that, it also contributes to the land grabbing since the easiness of investment in natural resources sector has encouraged the investors to do so.

Further, Marthin Hadiwinata from KNTI (Union of Indonesia traditional fishers) said that “trade agreement between Indonesia and EU will only exploit Indonesia’s fishery business.” Martin also added that “the trade of fishery product overseas in CEPA EU-Indonesia has infringed the Article 25B Fishery Act Number 45/2009 which constitutes that to give priority to fulfill domestic consumption first.”

Executive Director for Indonesia for Global Justice (IGJ), Rachmi Hertanti, has remind Indonesian government for not making any inconsistent commitment against the effort to strengthen the local industry. “For instance, the EU proposal which request Indonesia to erase the policy of TKDN (local content requirement), has omitted the policy which obliged the EU corporations to partnered with local companies, and also has erased the limit of foreign equity cap in several sectors. Thus, Indonesian government needs to involve the society to give them inputs pertaining the bargaining position in that negotiation, so that our national interest will be guaranteed,” Rachmi suggested.

Coordinator for Solidaritas Perempuan (Women Solidarity), Nisaa Yura stated that the economy policy which has orientation to investment will marginalize women from their sources of life. ”CEPA will aggravate the poverty which has existed and experienced by the society, and especially by the women, “she said.

Kurniawan Sabar from INDIES argued that CEPA will basically intensify the monopoly and exploitation to Indonesia’s natural resources. “The agreement will facilitate the trade interest of the EU’s corporates and will be detrimental for Indonesian people in all sectors i.e labors, farmers, women, urban poor people, youth, minority groups, indigenous people, and others."

The negotiation between Indonesia – European Union has been launched since 18 July 2016. The first round has been conducted in Brussels, Belgium, on 20-21 September 2016.

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